The First and Second Final Rules

        On May 30, 1997, the Commission issued in final form its rule setting an over-order obligation and producer price for milk distributed in the Compact region.[1] The rule included the regulatory machinery necessary to administer the obligation on processors and payments to farmers.[2]  The regulatory procedures provided for the uniform treatment of all processors selling fluid milk in the regulated New England region, including processors located both within  and outside the regulated region.  The regulation also provided for the uniform treatment of all dairy farmers who provide the raw milk supply for these processing facilities, again regardless of whether the farmers are located within or outside the New England region.

As also required by the Compact, the findings in the rule recorded that the Commission had conducted a referendum of dairy farmers on the regulation, whereby over 99% of dairy farmers voted in favor of the proposed regulation.[3]

Shortly after establishing the price regulation, the Commission adopted an interim rule setting the procedures by which milk processors could challenge its imposition of the regulation, or petition for an exemption from that regulation.[4]

            On September 8, 1997, the Commission issued a proposed rule to extend the over-order price regulation past the first six months and throughout the entire period of congressional consent to the Commission.[5]  On November 25, 1997, the Commission made this change in its second final rule.[6]  In its announcement of both the proposed and final rules, the Commission determined that there were no signs of unexpected market disruption warranting termination of the price regulation.